Litigation Release No. 21581 / June 29, 2010

The Securities and Exchange Commission today filed a settled federal court action against San Jose, California-based telecommunications company Veraz Networks, Inc., alleging that Veraz violated the books and records and internal controls provisions of the Foreign Corrupt Practices Act (FCPA). The alleged violations stemmed from improper payments made by Veraz to foreign officials in China and Vietnam after the company went public in 2007.

The SEC alleges that Veraz engaged a consultant in China who in 2007 and 2008 gave gifts and offered improper payment together valued at approximately $40,000 to officials at a government controlled telecommunications company in China in an attempt to win business for Veraz. A Veraz supervisor who approved the gifts described them in an internal Veraz email as the "gift scheme." Similarly in 2007 and 2008, the SEC alleges that a Veraz employee made improper payments to the CEO of a government controlled telecommunications company in Vietnam to win business for Veraz.

According to the SEC's complaint, filed in U.S. District Court for the Northern District of California, Veraz violated the books and records and internal controls provisions of the FCPA by failing to accurately record the improper payments on its books and records, and failing to devise and maintain a system of effective internal controls to prevent such payments. Veraz, without admitting or denying the allegations in the Commission's complaint, consented to the entry of a final judgment permanently enjoining Veraz from future violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 and ordering Veraz to pay a penalty of $300,000.

The SEC acknowledges the assistance of the U.S. Department of Homeland Security during the investigation.